SCHZ — Schwab US Aggregate Bond ETF
SCHZ is Schwab's total US bond market ETF, tracking the Bloomberg US Aggregate Bond Index at an industry-tied-lowest 0.03% expense ratio. It is functionally identical to BND (Vanguard) and AGG (iShares) in coverage and composition, providing exposure to the entire US investment-grade taxable bond market. SCHZ is ideal for Schwab-platform investors who want the lowest possible cost for a broad bond market core.
Top Holdings
Strategy
- →Use as the bond core in a low-cost three-fund or two-fund Bogleheads portfolio on Schwab
- →Pair with SCHB (total US equity) and SCHF (international equity) for a complete Schwab three-fund portfolio
- →Rebalance annually to maintain target allocation between stocks and bonds
- →Increase allocation as retirement approaches to reduce overall portfolio volatility
Best For
- ✓Schwab platform investors building an ultra-low-cost passive portfolio
- ✓Bogleheads who prefer the Schwab fund suite for tax efficiency and commission savings
- ✓Long-term savers building a complete retirement portfolio in one brokerage
- ✓Passive investors who simply want the entire US bond market for 0.03%
Key Risks
- ⚠Same risks as BND/AGG — interest rate, credit, and inflation risk of the broad US bond market
- ⚠Duration of approximately 6 years creates meaningful rate sensitivity
- ⚠Smaller AUM than BND or AGG may result in slightly wider bid-ask spreads
- ⚠Mortgage-backed securities component carries prepayment and extension risk
Similar ETFs
Frequently Asked Questions
Is SCHZ the same as BND?
SCHZ and BND track the same Bloomberg US Aggregate Bond Index and both charge 0.03%. The main difference is the issuer (Schwab vs. Vanguard) and AUM/liquidity (BND is significantly larger). For most investors the choice is a matter of platform preference. This is educational content, not financial advice.
What is SCHZ's expense ratio?
SCHZ charges 0.03% annually, tied for the lowest in the broad US bond market category alongside BND and AGG. This is educational content, not financial advice.
Does SCHZ pay monthly dividends?
Yes, SCHZ distributes monthly income from the interest earned across its thousands of bond holdings. This is educational content, not financial advice.
Is SCHZ appropriate for a 60/40 portfolio?
Yes, SCHZ is a natural choice for the 40% bond component of a classic 60/40 balanced portfolio on the Schwab platform. This is educational content, not financial advice.
How does SCHZ handle mortgage-backed securities?
Like BND and AGG, SCHZ includes agency mortgage-backed securities (MBS) as part of the Bloomberg US Aggregate Index. These MBS are issued or guaranteed by government agencies and account for roughly 25–30% of the fund. This is educational content, not financial advice.
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